Derby Company Income Statement For Year Ended December 31, 2012 Sales Cost of go

Question

Derby Company Income Statement For Year Ended December 31, 2012 Sales Cost of goods sold Depreciation expense Other operating expenses Interest expense Other gains (losses): $488,000 $212,540 43,000 106,260 -6.400 (368.200) Gain on sale of equipment Income before taxes Income taxes expense Net income 124,500 41100 $ 83400 dditional Information a. A $20,000 note payable is retired at its carrying value in exchange for cash. b. The only changes affecting retained earnings are net income and cash dividends paid. c. New equipment is acquired for $120,000 cash. d. Received cash for the sale of equipment that had cost $85,000, yielding a gain of $4,700. e. Prepaid expenses relate to Other Expenses on the income statement. f. All purchases and sales of merchandise inventory are on credit.

Explanation / Answer

Answer:-

Derby Company Statement of Cash Flow (Using Indirect Method) For the year ended December 31,2012 Particulars Amount $ Cash flow from opreating activities Net Income 83400 Adjustments to reconcile net income to net cash provided by opreating activities Adjustment for non cash effects Depreciation 43000 Gain on sale of investments -4700 Change in opreating assets & liabilities Increase in Accounts Receiviable -16100 Increase in Inventory -12900 Decrease in prepaid expenses 6600 Increase in income tax payable 3000 Increase in Accounts payable 7400 Net cash flow from opreating activities 109700

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